When May I File a Low Utilization Cost Report?

What's a low utilization cost report and may I file one?

A low utilization cost report is an abbreviated version of the Medicare cost report.  It typically includes several of the S series worksheets (statistical data) and the facility’s balance sheet and income statement, with requirements varying by facility and by MAC (intermediary).

A low utilization cost report never requires an electronic file (flash drive, CD, etc.), and is typically much less time- and labor-intensive than its full counterpart, making it much less costly for a facility to file one.

The requirements for filing a low utilization cost report (LU) also differ by MAC, but there are general rules.  For most facilities, net Medicare reimbursement per the PS&R of under $200,000 will qualify a facility for a low utilization report.  For RHCs and FQHCs, the net Medicare reimbursement must be under $25,000 in order to file an LU.

Until recently, facilities may also have been eligible to file LUs if they had less than 10% overall Medicare usage, i.e., if less than 10% of their total visits/ patient days were covered by Medicare.  This criteria has now become obsolete.  Going forward, for any cost report with an end date of 1/1/17 or later, only the net reimbursement from the PS&R will be the determining factor as to whether the LU may be filed.

Please Note:  The determination amount depends on the Net Reimbursement on the PS&R that the MAC is looking at when the cost report is being processed.  Often, the amount that you see on the PS&R will vary from what the MAC sees based on ongoing billing for the cost report year.  If your Medicare utilization (Net Income) is close to $200,000 / $25,000 on the PS&R, and all of your claims may not have yet been filed for the year, it may be recommended to file a full cost report, in any case.  Otherwise, you risk cost report rejection and suspension of payments.

As a reminder, many MACs require advance permission for filing a low utilization cost report.  Therefore, if you intend to file one, make sure to check with your MAC first.

Disclaimer:  This blog does not contain legal advice. What it does contain are our best
explanations, advice, and suggestions to help facilities and cost report preparers to understand the cost report forms and offer suggestions for their preparation. Progressive Provider Services assumes no legal responsibility for the content of this blog, nor for cost reports prepared based on the content herein.

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